Guild Wars 2

So what is Pump and Dump?

from the U.S. Securities and Exchange Commission. March 12, 2001:

""Pump and dump" is a form of microcap stock fraud that involves artificially inflating the price of an owned stock through false and misleading positive statements, in order to sell the cheaply purchased stock at a higher price. Once the operators of the scheme “dump” their overvalued shares, the price falls and investors lose their money. Stocks that are the subject of pump and dump schemes are sometimes called “chop stocks”

What does this mean in GW and how does it affect you?

Easy “Player F” buys tons of cheap mats/items lets say for arguments sake: Chests, Pumpkins, Cinnamon, Tonics :wink, wink: and then start rumors about huge profits or that they “might” be needed during an upcoming event and how he/she is glad that he/she bought them cheap.

As other players read this “advice” they start buying the same mats/items that “Player F” so helpfully recommended “pumping” the price up. At this point “player F” “dumps” all of his/hers items/mats making a profit while crashing the market of said items making everyone else that bought into the scam lose their gold.

As with anything else in life if something seem to good to be true, then its most likely a scam. Do you research first and don’t make rash decisions. Pump and Dump scams are very common both in game and IRL. Be smart about your gold/money.

I fear I fell for the cinnamon scam, if a scam it was :P

Well… My way of seeing the thing is very positive. First, I’ll have a lifetime supply, and second… It makes an insanely hilarious “present” to give to friends XD

You never know, Anet has a sense of humour. They might decide to throw some last minute forge recipe in that uses cinnamon sticks for the people that fell for the rumor or have just been hoarding them.

So the scammers will be like (._.)
and the “victims” like

That would be about on par with their usual level of shenanigans.

Its true, there might be a recipe added or not.

Its not wrong to buy something that you “think” will rise in price or that may become useful in the future and make a profit. The problem is letting others decide it for you. If you have done your research or simply have a gut feeling that x item will rise in price then by all means buy low and sell high.

Just beware when other players come to the forums talking about huge profits to be made if you buy x item as they may have other intentions.

Cinnamon was too big to fail.

Just like in real life, the fact of the matter is that the greedy get scammed out of a few gold because they are trying to make a quick buck.

These kinds of rumor scams are why legit companies have to pay tons of money to keep the public updated with their doings (financial reporting).

The way to deal with rumor scams (if ANet cares which they don’t have to) is to have transparent information. IE This is coming and these are the patterns.

Maybe they’ll add a cinnamon recipe at Christmastime.

Thanks for the info on the Pump & Dump. Old EVE Online players are familiar with these sorts of tricks, but new GW2 players may not suspect that sort of manipulation to happen.

The Black Lion Trading Company: Where the REAL PvP happens.

This should get stickied imo

The long and short of it is that no trader who has a corner of the market to themselves will ever go out and tell people “Man I’m making so much money trading X!”.

If they do they’re either a bit dull, drunk or scamming you.

Or they just like to brag, and the bragging rights are more important than the money. I talk about arbitrage (buying low and selling high when there’s a wide gap between bids and offers) all the time, but that’s just because I doubt arbitrage opportunities will ever go away, and if they did, I’d just find more money in other areas (since arbitrage is a profitable method of “repairing” the market).

<— proud profiteer of the Black Lion Chest bubble of 10/12

@Stevie yeah I saw some of your posts… some so obvious that I facepalm when people went for it but truth be told better they learn in a game that IRL.

I’m sure you already know that even with this post people will still fall for the next bubble. I’m actually starting a betting pool on what will get pumped for Wintersday.

Red dyes maybe.. or someone may “leak” the recipe for fruitcake….

Cancer.9065:

@Stevie yeah I saw some of your posts… some so obvious that I facepalm when people went for it but truth be told better they learn in a game that IRL.

I’m sure you already know that even with this post people will still fall for the next bubble. I’m actually starting a betting pool on what will get pumped for Wintersday.

Red dyes maybe.. or someone may “leak” the recipe for fruitcake….

inb4 Black Lion Chests actually DO raise in price and I never should have sold the 15,000 that I had at 60 copper. (._.)

I don’t really think spreading a rumor is anything like RL or should even be considered a scam. (not that I have done it) I saw some of my Guildies fall for the BLC bubble buying several Gold worth until I pointed out that each Chest required a key which cost about 1 Gold each to open. So having 10000 BLC wasn’t going to be easy to sell. I ended up using the bubble to dump a bunch of chests sitting in my inventory.

If you are intelligent you can actually profit from those speculation spikes. Takes time away from gaming though since you have to sit and watch the TP like a hawk.

@ NinjaKnight IRL Pump and Dump its labeled as a scam and its punishable with jail under US law and they work the same way as in the game.

Now do I think it should be policed in game or punished? not really its a game after all and is something very easy to avoid. Just getting the information out there tends to help a bit.

I understand that not everyone that participates in the bubble are “scamming” many simply get lucky and go for the ride. Others though are malicious about it. I called a Pump and Dump for tonics and got a PM asking me to take down my post by the OP, who basically confessed to the pump and dump scheme.

Cancer.9065:

@ NinjaKnight IRL Pump and Dump its labeled as a scam and its punishable with jail under US law and they work the same way as in the game.

What you left out of this is the fact that the information has to come from a reliable source. ie: insider info. Or a claim that the information is genuine. Then it becomes a scam.

Mere publishing of speculative information is not illegal. If I write on my blog that I think stock xyz is going to go up due to … (based on publicly available info) that is not illegal. Same as in game.

there exists a 15% fee to lower the profit of this but people seem to be really really gullible.

You are right @NinjaKnight that merely writing about a stock wont get you into trouble (otherwise all financial newsletter would be illegal) but the Pump and Dump scam requires 3 very defined steps:

1. buying tons of penny stock (in this case cheap mats)
2. start rumors and speculations with the INTENT of pumping the price of said stocks/mats (most used method today is spamming)0
3. selling the penny stocks (or cheap mats) before the markets crashes.

The actions by themselves do not constitute a crime, its the intention of the scammer that gets him punished. Like I said many rumor threads are started with the sole intention of pumping the price to sell.

Anyway no need to argue, like is said in the post you quoted, I do not think this should be policed in game, nor punished. Simply getting the information out there is enough IMO.

Yeah, I personally think pump and dump is one of a great many things that shouldn’t be as tightly regulated in-game as they should be in real life. Quite simply, no one loses anything of significant real value if the in-game market crashes. No one starves or loses their job or house if they make a bad BLTC financial decision, and therefore no one should be so harshly punished for encouraging bad BLTC financial decisions as they are in the real world.

This is why speculation on the internet should never be trusted…..unless you’re smart about it. For instance, I was pretty sure sugar pumpkins would NOT be used for anything during the event. Why? GW1 didn’t do anything like that, and the items you could get during festivals weren’t even sellable, so why would anything be different in GW2? However, I knew that many people would be speculating on sugar pumpkins and that that would drive the price up.

So, I invested in them before the price jump. 24 hours before the event kicked off, I dumped all my pumpkins on the TP for 150 copper each. They all sold within an hour. I didn’t spread any rumors, but I knew others would and that people would fall for it because the average player doesn’t do their own research. Sadly, this will probably happen again at Christmas and I’m pretty sure the same thing will happen again next year.

Haha, yeah, I didn’t plan ahead far enough to invest in pumpkins directly, but I did make a gold or two last night selling what I already had in my bank and then re-harvesting both patches with my two characters high enough to survive those zones.

And looking at gw2spidy now, I see that they’re going for quite a bit cheaper even than they were before the bubble, so if I wanted I could buy back the same number I sold and still have made quite a hefty profit.